The molecular mechanism of Fv-1 restriction was investigated using a sensitive Southern gel transfer technique. In BALB/c cells, Form III linear DNA is synthesized in normal amounts by restricted viruses but conversion to Form I circular DNA is blocked. Restriction endonuclease studies on viral DNA synthesized in BALB/c cells indicate that the linear DNA produced under nonpermissive conditions is defective, lacking two sets of 70 base pair repeated sequences. Fv-1n cells differ in their ability to restrict B-tropic MuLVs. Thus, DBA/2 cells appear to block synthesis of Form I circular DNA by B-tropic MuLVs, while NIH cells restrict at an earlier step, blocking formation by linear DNA. A recombinant between N-tropic and B-tropic MuLV which is sensitive to Fv-1b restriction but lacks the ability to abrogate has been partially characterized.